The Rise of Virtual Financial Advisers

If I’d asked you four or five years ago what you thought about working with a “virtual” financial adviser, my guess is you’d have been skeptical.

The idea of meeting remotely, using video conferencing platforms like Zoom, probably would have seemed too foreign, too intimidating or simply inappropriate for discussing something as personal as your finances.

Then came the COVID-19 pandemic in 2020. We all learned quickly about using technology to overcome communication challenges when we couldn’t meet in person.

Discovering Convenience in Virtual Financial Advising

Moreover, we discovered there are numerous perks to conducting business this way. Running a strictly virtual financial advisory firm can be both time and cost-efficient for both advisers and their clients. The benefits extend to clients as well:

• Clients can schedule meetings at their convenience and use their phones or computers to talk from anywhere—be it their office, couch, or kitchen table.
• They avoid the hassles of traffic, parking fees, and having to remember which documents to bring. Screen sharing allows for real-time discussions about their portfolios.
• The geographical limitation is eliminated, allowing clients to choose advisers based on expertise and credentials rather than location. If they move, they can continue working with the adviser they know.
• Virtual meetings eliminate the canned sales pitch typical of traditional meetings, allowing for a more focused and personalized experience.

Challenges of Virtual Financial Advising

However, there are challenges associated with using a virtual financial adviser, especially for those who may not be particularly tech-savvy. Clients must learn how to log on and use various platforms for meetings, and they may need to scan and sign documents electronically.

If you value face-to-face interaction, you might prefer meeting with your adviser in person. Many traditionalists refuse to transition to virtual meetings, but this is changing as virtual firms offer convenient solutions.

Who Prefers Virtual Meetings?

According to a 2021 J.D. Power survey, 55% of full-service investors under 40 prefer digital channels for communicating with their advisers, compared to only 26% of older investors. This trend may reflect not only comfort with technology but also the flexibility busy younger investors enjoy with virtual consultations.

Interestingly, many retirees are equally busy—traveling, engaging in hobbies, or spending quality time with family. They too can take advantage of the convenience offered by virtual meetings, regardless of their location.

While a virtual adviser may not physically comfort you during stressful economic times, they can still provide comprehensive financial services just like traditional offices.

Understanding the Distinction: Virtual Advisers vs. Robo-Advisers

It’s important to clarify that we are not discussing robo-advising here. Robo-advisers utilize algorithms for investment management with limited personal interaction. In contrast, a full-service virtual financial adviser can offer a human touch and assist with a range of services from portfolio management to tax planning and retirement income setups.

Furthermore, when choosing a virtual adviser, consider their qualifications, fee structures, and background to ensure a good fit. The security of your communications should also be a top priority throughout the process.

Choosing an adviser with whom you feel confident and comfortable is crucial.

A Game-Changer for Financial Planning

If you’re seeking a transformative way to receive financial advice, virtual advising might be the perfect solution. The traditional financial planning process has evolved to offer clients greater value—many who initially opted for virtual meetings out of necessity are now embracing them by choice.

Kim Franke-Folstad contributed to this article.

The views presented here are those of the contributing adviser and do not necessarily reflect the opinions of iBestTravel. Adviser records can be checked with the SEC or FINRA.